COINSILIUM GROUP LIMITED Coinsilium Group Limited: Final Results for the year ended 31 December 2020
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Coinsilium Group Limited (COIN)
COINSILIUM GROUP LIMITED ("Coinsilium" or the "Company")
1 July 2021 Final Results for the year ended 31 December 2020
STATEMENT OF THE BOARD OF DIRECTORS
Coinsilium Group Limited ("Coinsilium", the "Group" or the "Company"), is pleased to announce its Final Results for the year ended 31 December 2020.
Financial summary
* Gain for the period includes gain in value of tokens over the period of £241,473.
The Directors present their report, together with the Group Financial Statements and Auditor's Report, for the year ended 31 December 2020. The comparative period is the year ended 31 December 2019.
The Directors do not recommend the payment of a dividend for the year ended 31 December 2020.
Operational summary
The Directors present their report, together with the Group Financial Statements and Auditor's Report, for the year ended 31 December 2020. The comparative period is the year ended 31 December 2019.
Review of the Year
Coinsilium has now completed its sixth year of operations as a listed company. In July 2020, we launched a strategic review with the ultimate objective to best position Coinsilium to maximise its potential. This strategic review concluded in December 2020, identifying the Open Finance and NFT market segments as emerging blockchain technology opportunities with significant growth and revenue generating potential. The Open Finance and NFT sectors were also recognised to be sectors where Coinsilium is well-positioned to play to its strengths, given its strong industry profile, relationships and global partnership network. Although the findings of the strategic review were announced towards the end of the year, much progress was made in 2020 which has enhanced the Company's prospects and ensured that it entered 2021 in a very strong position. This progress included various agreements and partnerships to ensure that Coinsilium is well positioned to take advantage of the very sizable opportunities that are now open to it.
Partnerships and Agreements: strengthening our geographic footprint and enhancing our technology offering
IOV Labs ("IOV") - In January 2020, Coinsilium entered into a Strategic Investment Agreement and signed a Memorandum of Understanding with IOV Labs, a Gibraltar registered company and parent to RSK, the developers of the first smart contract platform secured by the Bitcoin network. IOV completed an investment of GBP250,001 by way of a private placement in the Company, subscribing for 9,434,000 new ordinary shares of no-par value ("Ordinary Shares") at 2.65p per share. In July 2020, Coinsilium announced an update regarding this Joint Venture Agreement (JVA) with IOV Labs to establish a Joint Venture Company (JVC) in Singapore. Under this agreement, each shareholder holds 50% of the total shares of the JVC at incorporation with the JVC financed by IOV by way of a loan which is to be repaid from the future revenues of the JVC.
In December 2020, Coinsilium announced it completed a follow-on investment agreement with IOV Labs Ltd and an expansion of the geographical scope of the IOV Labs Asia Joint Venture Company from regional to worldwide. IOV invested GBP330,000 in Coinsilium by way of a private placement, subscribing for 11,000,000 new ordinary shares of no-par value (the "Subscription Shares") at 3p per share. One warrant was subsequently issued for every two shares subscribed for, with an exercise price of 4.5p per new ordinary share, and a life to expiry period of two years from the admission of the Subscription Shares.
Indorse Pte. Ltd. ('Indorse'). In August 2020 Coinsilium announced its appointment as an advisor to Indorse in respect to its forthcoming initiative to revive the token economics of its IND token through a new DeFi based model.
RedFOX Labs Joint Stock Company ("RedFOX"). In December 2020, Coinsilium was pleased to report that, in line with the Company's new business development strategy, its wholly owned subsidiary Coinsilium (Gibraltar) Limited concluded a Technical Development and Support Agreement with Vietnam-based RedFOX Labs Joint Stock Company ("RedFOX"), to support the creation of a range of Virtual Asset and Digital Collectible marketplaces and to facilitate the trading of Non-Fungible Tokens (NFTs) across various prospective market sectors.
The Gibraltar Philatelic Bureau Ltd. In December 2020, Coinsilium announced that it had concluded an agreement with The Gibraltar Philatelic Bureau Ltd for the creation of a commemorative limited edition Cryptocurrency Postage Stamp to be released in Q2 2021. The Crypto Postage Stamp is to be tied to the release of a blockchain based Digital Collectible, or non-fungible token ('NFT') counterpart, to be exclusively produced by Coinsilium in collaboration with Vietnam-based RedFOX Labs Joint Stock Company.
Other developments
In October 2020, Coinsilium's ordinary shares began cross-trading publicly on the OTCQB Venture Market ("OTCQB") in the United States under the ticker symbol "CINGF". Coinsilium's shares had previously been quoted on Pink Open Markets (also known as 'Pink Sheets'), which provided some measure of limited and restricted US trading. By upgrading the listing of its shares to the OTCQB, these limits and restrictions have been removed, providing access to a new and materially larger pool of prospective US investors.
On 29 December 2020, Coinsilium announced that it had agreed to sell 1,450,000 of its 6,130,000 ordinary shares that are held in treasury, at 4.5 pence per share for gross proceeds of £65,250.
For the Group's and Company's 31 December 2020 financial statements, the COVID-19 outbreak and the related impacts are considered non-adjusting events. There has been no significant disruption to the Group's and Company's activities to date from COVID-19, although the Board continues to monitor any risk.
Post year end
Since the period end, significant progress has been made to consolidate Coinsilium's position within the NFT and Open Finance spaces.
Nifty Labs Limited
In March 2021, the Group's wholly owned Gibraltar subsidiary, Terrastream Limited ('TerraStream'), entered into a Memorandum of Understanding ('MoU') with Indorse Pte. Ltd. ('Indorse'), a Singapore company in which Coinsilium holds a 10% equity interest, to form a Partnership or Joint Venture in order to launch a Non-Fungible Token ('NFT') technology development studio in Gibraltar. The partnership, to be based in Gibraltar and conducted through TerraStream, was renamed 'Nifty Labs Limited' and trades under the commercial name 'Nifty Labs'. Additionally in March 2021, Coinsilium announced that Nifty Labs and Indorse continue to advance discussions towards a formal agreement while the Company agreed to provide Nifty Labs with an initial working capital and development facility of up to GBP250k. Whilst discussions regarding the partnership remain ongoing, it has been agreed that, in the event that any commercial agreements relating to in-house projects or prospective third-party clients are concluded ahead of the completion of the Partnership Agreement, as an interim solution, such commercial agreements shall be undertaken with a provision for a revenue share agreement between Nifty Labs and Indorse, the terms of which shall be established in each case.
In May 2021, Nifty Labs commenced development work on a new Non-Fungible Token ("NFT") project to create an 'NFT on Bitcoin' marketplace platform powered by the RSK blockchain, the smart contract platform secured by the Bitcoin network. Development work on an NFT marketplace platform has commenced and is expected to take 6 months to complete. The initial focus of the marketplace will be on NFT use-cases such as digital art, music, sports, gaming and metaverse assets. RSK is prioritising a token bridge build enabling the transfer and movement of RSK blockchain standard NFTs to other blockchain standard NFTs, including Ethereum ERC721.
A team of three software developers, one designer and a project manager have been deployed to work on the initial commissioning and build phase.
When complete, the platform will incorporate various modules including an NFT minter, a gallery, and the capability to trade NFTs for alternative RSK-based tokens. The marketplace is initially being built to host the most popular NFT categories which currently include digital art, sports, music, gaming and metaverse assets such as parcels of virtual land and 3D avatars. It is intended that the marketplace will have the capability to offer functionalities similar to those available on other popular NFT marketplaces and with potential compatibility with NFTs on other platforms. Future options may also include interoperability between various layer 1 and layer 2 blockchain protocols.
In April 2021, Indorse released the public alpha of 'Nifty Scanner', a digital asset analysis software solution for Non-Fungible tokens (NFTs). Nifty Scanner is a browser extension and is now available on Google Chrome, Mozilla Firefox, Opera and Brave which 'scans' Non-fungible Tokens ('NFTs') and provides detailed essential background information on how and where the assets (the media and the metadata) associated with an NFT are stored. Currently, Nifty Scanner is compatible with the OpenSea marketplace and will shortly be compatible with other popular marketplaces as well.
Board
On 1 March 2021, Federica Velardo joined the Board as a Non-Executive Director of the Company with immediate effect. Federica Velardo is a qualified solicitor in England and Wales and, having applied for dual qualification in Italy, also practices Italian law. Her experience covers national and international transactions including advising and assisting companies on sales, mergers and acquisitions, joint ventures, investments, admissions to the AIM Market of the London Stock Exchange, fundraising and general corporate-commercial advice. The Company also notes that Tony Sarin has resigned as a Non-Executive Director with immediate effect. The Board wishes to thank him for his significant contribution to the Company and his guidance and support to the Board provided over his six-year tenure, and to wish him every success in all his on-going and future endeavours.
Other Developments
On 2 March 2021 Coinsilium announced that it has received notice from IOV Labs Limited (IOV) of the early exercise of warrants over 5,500,00 new ordinary shares in the Company at a price of 4.5p for a total consideration of GBP247,500.
Following the exercise of the warrants, IOV Labs shareholding in Coinsilium increased from 20,434,000 to 25,934,000 ordinary shares representing an interest of 16.85% of the Company's outstanding shares at that time, excluding warrants and treasury shares. Given the early exercise of the IOV warrants, approximately 21 months prior to expiry, the Company agreed to award IOV with 5,500,000 replacement warrants exercisable at a price of 12p per share valid for two years from the date of this announcement.
On 25 May 2021 Coinsilium successfully raised £1.155m gross of expenses through a share subscription and placement of 15,400,000 new ordinary shares of no par value ("Ordinary Shares") at a price of 7.5 pence per share (the "Placing Shares") from existing and new shareholders. Each Placing Share has an attaching warrant to subscribe for a further new ordinary share at an exercise price of 15p ("Warrants"), valid for two years from the date of issue. The funds raised will primarily be used for strategic investment purposes, particularly in the Non-Fungible Token ("NFT") and Open Finance sectors and to accelerate the Company's growth trajectory.
Outlook
Having undergone a strategic review during the course of the second half of 2020, the Company has emerged with a strong focus on digital markets that are poised for significant growth. The opportunity going forward - particularly within the NFT and Open Finance spaces - is significant and the Board remains confident in the Company's outlook. This confidence is backed up by the series of announcements we have made particularly within the NFT space since our year end.
While the Open Finance and NFT markets are in their infancy, our work to date has increases our confidence in the Company's ability to generate credible revenue streams: the Gibraltar Crypto Stamp and the Gibraltar Genesis Collection of NFTs have spotlighted our technology focus and capability within the area. While principally working pilots, they have served to generate a broader interest that we aim to capitalise on. Therefore, we are looking forward to building on their successes with a new NFT collection planned for the second half of 2021 and further collections over the course of 2022.
Sales of NFT collections have a two fold impact on our ability to generate revenues: firstly, we will generate revenues from the initial sale or 'drop' of the NFT; and then again from all secondary market trading activities (particularly pertinent in respect of the rarer and more valuable digital assets) with the capability for programming into the smart contract a commission or royalty on any subsequent trades.
Beyond this, we believe our wholly owned Nifty Labs subsidiary has the potential to generate significant value for the Company. It is currently playing an integral role in the development of our marketplace - which is currently in the build out phase - in conjunction with its partner, Indorse. The capability to develop a bespoke marketplace solution not only showcases our tech development capability, it also allows us to create something that will be of benefit to the wider blockchain ecosystem. The marketplace, once completed, will see us further capitalise on a structural tailwind and trend in digital asset markets.
We are able to do this while looking forward from a secure financial position. All of our current operational commitments are fully funded up to January 2022 and beyond. In May 2021 we raised additional capital of £1.155m to accelerate the Company's growth trajectory. This provides us with a very significant financial base which means we can continue to be strategically flexible and take an opportunistic approach to new developments and opportunities within the rapidly developing NFT and Open Finance markets. It also allows us to continue to innovate - something we have a proud history of - and leverage our partnerships, enabling us to remain at the forefront of the digital finance markets.
Finally, the Board would like to thank all shareholders, partners and team members for their continued support and we look forward to providing the market with regular progress updates at this exciting period for the Company and the wider digital asset industry
Financial Review
Total comprehensive income, including fair value gains and losses on financial assets and digital assets, reported a gain for the period of £661,139 compared to a loss of £106,378 in the previous year.
Gain for the period from continuing operations was £309,590 (2019: loss of £258,943). This gain is the result of administrative expenses of £620,197 during the period, an increase in net fair value of equity investments of £565,713 and impairments to other current assets of £42,558 (loss in the value of tokens).
As at 31 December 2020, cash and cash equivalents amounted to £173,298 (2019: £235,079).
Eddy Travia Chief Executive 30 June 2021
The Directors of Coinsilium Group Limited take responsibility for this announcement.
For further information, please contact:
The Directors of Coinsilium Group Limited take responsibility for this announcement.
COINSILIUM GROUP LIMITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020
COINSILIUM GROUP LIMITED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2020
The Financial Statements were approved and authorised for issue by the Board of Directors on 30 June 2021 and were signed on its behalf by:
Eddy Travia Executive Director
FOR THE YEAR ENDED 31 DECEMBER 2020
COINSILIUM GROUP LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020
COINSILIUM GROUP LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020
FOR THE YEAR ENDED 31 DECEMBER 2020
ACCOUNTING POLICIES
1 General Information
Coinsilium Group Limited ("the Group" or "the Company") is a limited liability company domiciled in the British Virgin Islands and is quoted on the Aquis Growth Market. The Company was incorporated on 25 September 2014. The principal business of the Company and its subsidiaries (together the "Group") is investing in and accelerating blockchain technology companies, together with a venture builder and token sale adviser. Headquartered in London, the Group accelerates and finances innovative blockchain companies, with the intent of supporting the further development and commercialisation of these technologies. The Group also provides advisory and promotional services to technology startups and companies looking to issue tokens via Token Generation Events such as Initial Coin Offerings. 2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated Financial Statements are set out below. These policies have been consistently applied unless otherwise stated. 2.1 Basis of preparation of Financial Statements
The Group and Company Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union. The Financial Statements have been prepared on the historical cost basis, except for the measurement to fair value of certain financial assets and financial instruments as described in the accounting policies below. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated Financial Statements are disclosed in Note 4. 2.2 New IFRS standards and interpretations
The group has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2020:
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2021 and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
ACCOUNTING POLICIES (continued)
2.3 Basis of Consolidation
The Group Financial Statements consolidate the financial statements of Coinsilium Group Limited and the financial statements of all of its subsidiary undertakings made up to 31 December 2020. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns through its control over the entity. Where an entity does not have returns, the Group's power over the investee is assessed as to whether control is held. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Inter-company transactions, balances, and income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Investments in subsidiaries are stated at cost less provision for impairment. 2.4 Going Concern
As described in the Results and Dividends section of this Directors' Report, the Group has reported an operating gain for the year.
In considering the Group's ability to continue in operation for the foreseeable future, the Directors have considered the forecast operating cash-flows for the period up to the end of 30 June 2022, and all other related matters. This involved consideration of the cash flow implication of the budget.
The Directors have controlled expenditures throughout the period and feel the current level of expenditures is in line with a business of its size. The Company successfully raised £580,001 during the period in two separate private subscriptions and additionally, a total of £1,552,500 was raised post period through a private placement and subscription, together with warrant and option conversions. These funds, together with the Company's liquid cryptocurrency treasury reserves provide the board with a high level of confidence, though the Directors continue to remain pragmatic and cautious in the control over the Group's cash and liquid assets. The Directors believe that COVID-19 has had no correlation or any effects to the Group's income from blockchain, crypto advisory and venture initiatives. Whilst the cryptocurrency markets continue to remain highly volatile, the board is of the view that the long term positive cryptocurrency trend remains firmly in place. This is witnessed by the fact that the prices of Bitcoin and Ethereum are, respectively, around 350% and 800% higher than they were a year ago. The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. 2.5 Business Combinations
The acquisition of subsidiaries in a business combination is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquired, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 2.6 Foreign Currencies
The functional currency of the Group and Company is UK Pound Sterling (£) and all values are rounded to the nearest Pound. This is on the basis that the Group is based in the United Kingdom, its overheads are generally incurred in sterling, its funds are generally held mainly in sterling bank accounts, and its investors have invested in sterling-based instruments. The Group financial statements are presented in UK Pound Sterling, which is the Group's presentational currency.
Transactions in foreign currencies are translated at the exchange rate ruling at the date of each transaction. Foreign currency monetary assets and liabilities are retranslated using the exchange rates at the reporting date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised in profit or loss. Non‑monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the date of the original transaction.
2.7 Intangible Assets
Brand and trademark intangible assets have been recorded at cost, being their estimated fair value at the time of acquisition. They are amortised over their estimated useful economic lives. 2.8 Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates: Office equipment - 33.33% straight line over the life of the asset
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
ACCOUNTING POLICIES (continued)
2.9 Financial Assets
From 1 January 2018 the Group and Company classifies its financial assets in the following measurement categories:
The classification depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. The Group's and Company's financial assets at amortised cost include trade and other receivables and cash and cash equivalents. A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.
The Group and Company classifies the following financial assets at fair value through profit or loss:
The Group and Company measures all equity investments at fair value through profit or loss.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
ACCOUNTING POLICIES (continued)
2.9 Financial Assets (continued)
Unquoted investments are valued by the Directors using primary valuation techniques such as recent transactions, last price or net asset value.
Where the fair value of an equity investment cannot be estimated reliably, such as investments in unquoted companies, fair value is based on cost less any impairment charges. In this case impairment charges are recognised in profit or loss. The Group assesses at each period end date whether there is any objective evidence that a financial asset or group of financial assets classified as available-for-sale has been impaired.
Loans and Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and other receivables fall into this category of financial instruments. In relation to the Company, loans to and from subsidiaries are also recognised within this category of financial instruments.
Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default on payment.
Other financial assets are also classified within the loans and receivables category.
Impairment of Financial Assets
The Group and Company assesses at the end of each reporting period whether there is objective evidence that a financial asset is impaired. For equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments are not reversed through profit or loss.
For loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's effective interest rate.
Impairment testing of available-for sale financial assets is described in Note 4.
2.10 Other Current Assets
Other current assets are digital assets, including tokens and cryptocurrency, which do not qualify for recognition as cash and cash equivalents or financial assets, and have an active market which provides pricing information on an ongoing basis. Other current assets are initially measured at fair value. Subsequently, digital assets are measured at fair value. Gains and losses on measurement are recognised in other comprehensive income except for impairment losses which are recognised directly in profit or loss. This treatment is consistent with the revaluation model applied to intangible assets in accordance with IAS 38. Where a digital asset is disposed of, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss. Digital assets are included in current assets as management intends to dispose of them within 12 months of the end of the reporting period.
2.11 Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and current and deposit balances at banks with maturities of three months or less from inception.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
ACCOUNTING POLICIES (continued)
2.12 Current and Deferred Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. The liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the group or parent company financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be recognised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax is calculated at the tax rates and laws that are expected to apply in the period when the liability is settled, or the asset is recognised based on tax laws and rates that have been enacted at the reporting date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.
2.13 Financial liabilities
Financial liabilities are recognised when the Group and Company becomes party to the contractual provisions of the instrument and are initially measured at fair value. They are de-recognised when extinguished, discharged, cancelled or expired.
The Group's and Company's financial liabilities comprise trade and other payables.
Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest rate method, less settlement payments.
2.14 Equity
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
The share capital account represents the amount subscribed for shares at nominal value. Since the Company's shares have a £Nil par value, no amounts are credited to share capital and all amounts received on the initial issuing of shares are credited to the share premium.
Treasury shares represent the cost of the Company's investment in its own shares.
Other reserves represent the accumulated fair value adjustments on other current assets that are not permanently impaired.
Share option reserve represents the fair values of share options and warrants granted.
Retained earnings/(deficit) include all results as disclosed in the statement of comprehensive income.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
ACCOUNTING POLICIES (continued)
2.15 Share Based Payments
The Group makes payments to third parties through share-based schemes, under which the entity receives services from third party suppliers as consideration for equity instruments (shares, options and warrants) of the Group. The Group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share based payments is recognised as an expense in the income statement or charged to equity depending on the nature of the service provided or instrument issued. The total amount to be expensed or charged in the case of options is determined by reference to the fair value of options granted:
In the case of shares and warrants, the amount charged to the share premium account is determined by reference to the fair value of the services received.
2.16 Revenue
Revenue comprises the fair value of the consideration received or receivable for consultancy and advisory services provided, excluding VAT and relevant sales taxes.
Revenue is recognised for services when the Group has satisfied its contractual performance obligation in respect of the services. The amount recognised for the services performed is the consideration that the Group is entitled to for performing the services provided. Consultancy and advisory services are recognised over time whereas success fees on completion of a Token Generation Event are recognised at a point in time.
The majority of contracts for services and success fees are for a fixed number of tokens and cryptocurrency, which equates to the fair value of services provided. Revenue is recorded at the token or cryptocurrency rate as quoted on the date the performance obligation is fulfilled.
2.17 Leases
Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
3. Financial Risk Management
3.1 Financial Risk Factors
The Group's activities expose it to a variety of financial risks being market risk (including interest rate risk, and currency risk), credit risk, and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
Market Risk
At 31 December 2020, management maintained the majority of the Group's cash assets in sterling bank accounts to minimise foreign currency risk. The Company will continue to hold any significant cash assets in sterling.
In respect of investments, management believe that the foreign currency risk is a far lower risk than the market risk and do not currently actively look to manage foreign currency risk arising from investments.
The Directors will continue to assess the effect of movements in exchange rates on the Group's financial operations and initiate suitable risk management measures where necessary.
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The Group's interest rate risk arises from its cash held on short-term deposit, and from the provision of convertible loans, which are not significant.
The Group is exposed to equity securities price risk because of investments held and classified in the Statement of Financial Position as financial assets through profit or loss. To manage its price risk arising from investments in equity securities, the Group could diversify its portfolio. However, given the size of the Group's operations, the costs of managing exposure to securities price risk exceed any potential benefits. In addition, the Group is exposed to high levels of price volatility in cryptocurrency and tokens. The Group currently seeks to manage price volatility risk by actively monitoring its portfolio of digital assets. The Directors will revisit the appropriateness of these policies should the Group's operations change in size or nature. The Group has no exposure to commodity price risk.
Credit Risk
Credit risk is the risk of loss associated with counterparty's inability to fulfil its payment obligations. The Group's credit risk is attributable to cash and cash equivalents and trade and other receivables. The credit risk on cash is limited because the Group invests its cash in deposits with well-capitalised financial institutions with strong credit ratings. The Group's exposure to credit risk is reduced as it deals with less new clients and more established clients.
Liquidity Risk
The Group's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at 31 December 2020 the Group had unrestricted cash of £177,739 to settle trade and other payables of £87,326. Most of these accounts payable have contractual maturities of less than 30 days and are subject to normal trade terms.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
3.2 Fair Value Estimation
Fair value measurements are disclosed according to the following fair value measurement hierarchy:
The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2020 and 2019:
Level 1 Level 2 Level 3 Total Assets £ £ £ £ Financial assets at fair value through profit or loss - Equity holdings - - 2,291,958 2,291,958 Other current assets - Tokens - 918,376 - 918,376 - Crypto Stamps 27,000 27,000 ______ ______ _______ _______
Total assets at 31 December 2020 - 945,376 2,291,958 3,237,334 ______ ______ _______ _______
Level 1 Level 2 Level 3 Total Assets £ £ £ £ Financial assets at fair value through profit or loss - Equity holdings - - 1,776,777 1,776,777 Other current assets - Tokens - 146,974 - 146,974 ______ ______ _______ _______
Total assets at 31 December 2019 - 146,974 1,776,777 1,923,751 ______ ______ _______ _______
Movements in financial assets at fair value through profit or loss are disclosed in Note 9 to the Financial Statements.
All financial assets are in unlisted securities and many are in companies which are pre-revenues.
Movements in other current assets for the year ended 31 December 2020 are disclosed in Note 13 to the Financial Statements. A level 2 hierarchy has been attributed to tokens as the traded exchanges are directly derived from the active market for Ether and Bitcoin exchanges.
There were no transfers between levels during the year.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
3.2 Fair Value Estimation (continued)
The Group recognises the fair value of financial assets at fair value through profit or loss at the cost of investment unless:
3.3 Capital Risk Management
The Group's objectives when managing capital are to safeguard the entity's ability to continue as a going concern, so that it can continue to develop and support its interests in cryptocurrency and blockchain technology products and services and provide returns for shareholders and benefits for stakeholders.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the number of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets.
The Group considers its capital to include share capital and share premium. Net cash comprises cash and cash equivalents only as there is no debt held.
4. Critical Accounting Estimates and Judgements
The preparation of the Group and Company Financial Statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, at the date of the financial information and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amounts, events or actions, actual results ultimately may differ from these estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant items subject to such estimates and assumptions include, but are not limited to:
On acquisition, investments are valued at cost as this is deemed to be the fair value. Subsequent to this, management uses valuation techniques and other relevant information to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date. COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
4. Critical Accounting Estimates and Judgements (continued)
Estimating fair value for share based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant of share options and warrants. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life, volatility and dividend yield and making assumptions about them.
Critical judgements in applying the Group's accounting policies include, but are not limited to:
(i) Assessment of Control and Significant Influence
Where the proportion of equity held in an investment is near or above 20%, the Directors consider carefully whether the Group has significant influence over the entity. The Directors consider the percentage of equity held, representation on the Board and the extent to which they are actually involved with management of the entity and their ability to change the percentage of equity held/ influence management in the future. Where management believes that the Group exerts significant influence over an investment, the investment will be considered an associate investment and equity accounted in the Financial Statements.
In the case of many of the investments acquired from Seedcoin Limited, Coinsilium Group Limited has agreed not to exercise its rights as a shareholder to influence the operation of the investees' businesses for the first twelve months after it acquired an interest in the investment. These agreements override any potential rights to exert significant influence or control these businesses, either as shareholder or through the appointment of Directors. Accordingly, the Directors have concluded these investments should be classified as financial assets at fair value through profit or loss as the Group has agreed and is legally bound not to exert any significant influence or control over these investments.
Following the lapse of the 12-month period over which the Group is legally bound not to appoint a director to the Board, or to influence strategic or operational policy over the investee, the Group may henceforth be required to reclassify some or all of these investments as either associates or subsidiaries as may be the case considering the situation at the time.
(ii) Impairment of Financial Assets
Financial assets at fair value through profit or loss have a carrying value of £2,291,958 at 31 December 2020.
The Group follows the guidance of IFRS 9 to determine when a financial asset is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost, and the financial health of, and short-term business outlook for, the investee, including factors such as industry and sector performance, changes in technology and operational, financing cash flow and proposed fundraising.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 5. Segmental Reporting The Group operates in two geographical areas; the UK and British Virgin Islands (BVI). The Company operates in one geographical area, the UK. Activities in the UK are mainly administrative in nature whilst activities in BVI relate to investment, and activities in HK relate to advisory services. The reports used by the chief operating decision maker are based on these geographical segments.
The Group generated revenue of £229,772 during the year ended 31 December 2020 (2019: £244,225). The Company generated revenue of £27,141 during the year ended 31 December 2020 (2019: £149,140).
FOR THE YEAR ENDED 31 DECEMBER 2020
6. Expenses by Nature
7. Intangible Assets
The intangible assets comprise two trademarks purchased for TerraStream and Tokenomix.
8. Property, Plant and Equipment
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
8. Property, Plant and Equipment (continued)
9. Financial assets at fair value through profit or loss
The Group classifies equity investments for which the Group has not elected to recognise fair value gains and losses through other comprehensive income as financial assets at fair value through profit or loss (FVPL).
The Group converted RSK Labs Limited shares into RIF tokens.
At 31 December 2020, the Group and Company owns unlisted shares in:
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
9. Financial assets at fair value through profit or loss (continued)
Financial assets at fair value through profit or loss are denominated in the following currencies:
10. Investments in Subsidiary Undertakings
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
10. Investments in Subsidiary Undertakings (continued)
Details of Subsidiary Undertakings
The registered office address of Coinsilium Limited is Unit 119 Chester House, 81-83 Fulham High Street, London, England, SW6 3JA.
The registered office address of Seedcoin Limited is Portland House, Glacis Road, Gibraltar.
The registered office address of TerraStream Limited is Portland House, Glacis Road, Gibraltar.
The registered office address of Flowstone Capital Limited is 5-9 Main St, Gibraltar.
The registered office address of Flowstone Management Limited is 5-9 Main St, Gibraltar.
The registered office address of Coinsilium Gibraltar Limited is Portland House, Glacis Road, Gibraltar.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
11. Trade and Other Receivables
The fair value of all trade and other receivables is the same as their carrying values stated above.
The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.
12. Cash and Cash Equivalents
13. Other Current Assets
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
13. Other Current Assets (continued)
Other current assets are digital assets, including tokens and cryptocurrency, which do not qualify for recognition as cash and cash equivalents or financial assets, and which have an active market which provides pricing information on an ongoing basis.
Breakdown of digital assets:
14. Trade and Other Payables
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
15. Financial Instruments
16. Share Capital and Premium
On 25 September 2014, Coinsilium Group Limited was incorporated to act as the holding company for the Group. On incorporation, 1 share was issued at £Nil par value.
Issued share capital
Treasury shares
During the year, on 29th December 2020, Big Island Holdings acquired 1,000,000 of treasury shares at 4.5p per share. As at 31 December 2020, the Company holds 5,130,000 of its own shares as Treasury shares (2019: 6,130,000 shares). The Company has the right to dispose of these Treasury shares at a future date.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
17. Other Reserves
18. Share Options and Warrants
Movements in the number of share options and warrants outstanding and their related weighted average exercise prices are as follows:
Share options outstanding and exercisable at the end of the year have the following expiry dates and exercise prices:
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
18. Share Options and Warrants (continued)
19. Employees
The Group had no full time employees and four Directors in the period. Details of Directors' remuneration are disclosed in Note 20.
20. Directors' Remuneration
All Directors are considered to be key management personnel.
No pension benefits are provided for any Director.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
21. Auditors Remuneration
During the year, the Group obtained the following services from the auditor:
22. Finance Income / Costs
23. Taxation
No charge to taxation arises due to the tax rate of 0% in BVI and the losses incurred in the UK.
The Company has UK tax losses of approximately £1,580,117 available to carry forward against future taxable profits. A deferred tax asset has not been recognised because of uncertainty over future taxable profits against which the losses may be utilised.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
24. Earnings per Share
Group The calculation of basic earnings per share of £0.2177 is based on the profit attributable to equity owners of the parent company of £661,139 and on the weighted average number of ordinary shares of 142,187,983 in issue during the period.
In accordance with IAS 33, basic and diluted earnings per share are identical as no share options or warrants were in the money based on the average share price throughout the year.
25. Commitments
The Group leases office premises and apartments under short-term operating lease agreements. The future aggregate minimum lease payments under short-term operating leases are as follows:
26. Related Party Transactions
Loan from Coinsilium Group Limited to Seedcoin Limited As at 31 December 2020 there were amounts receivable outstanding from Seedcoin Limited of £89,857 (2019: £723,176). No interest was charged on the loan.
Loan from Coinsilium Group Limited to Coinsilium Limited As at 31 December 2020 there were amounts receivable of £738,163 (2019: £1,599,474) from Coinsilium Group Limited. No interest was charged on the loan.
Loan from Coinsilium Group Limited to TerraStream Limited As at 31 December 2020 there were amounts receivable of £60,792 (2019: £60,363) from TerraStream Limited. No interest was charged on the loan.
Loan from Coinsilium Group Limited to Coinsilium Gibraltar Ltd As at 31 December 2020 there were amounts receivable of £61,047 (2019: £14,518) from Coinsilium Gibraltar Ltd. No interest was charged on the loan.
Consulting Services charged by Westrock Resources Limited to Coinsilium Group Limited As at 31 December 2020 there were amounts payable of £3,389 (2019: £8,111) to Westrock Resources Limited.
Rental Services charged by ECR Minerals plc to Coinsilium Limited As at 31 December 2020 there were amounts payable of £2,000 (2019: £nil) to ECR Minerals plc.
All intra-group transactions are eliminated on consolidation.
27. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling party.
COINSILIUM GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
28. Events after the Reporting Date
Since the end of the reporting period:
11 February 2021 - Coinsilium Group is pleased to announce that its new website, reflecting the Company's new strategic operational focus and refreshed branding, is now live and may be viewed via the following link: The Company is also pleased to announce that its London representative office address has changed with immediate effect.
01 March 2021 - Coinsilium Group announced the appointment of Federica Velardo as a Non-Executive Director of the Company with immediate effect. Federica is a qualified solicitor and her experience covers national and international transactions including advising and assisting companies on sales, mergers and acquisitions, joint ventures, investments, admissions to the AIM Market of the London Stock Exchange, fundraising and general corporate-commercial advice. The Company also notes that Tony Sarin has resigned as a Non-Executive Director with immediate effect. The Board wishes to thank him for his significant contribution to the Company and his guidance and support to the Board provided over his six-year tenure, and to wish him every success in all his on-going and future endeavours.
02 March 2021 - Coinsilium Group is pleased to announce that its wholly owned Gibraltar subsidiary, Terrastream Limited ('TerraStream'), has entered into a Memorandum of Understanding ('MoU') with Indorse Pte. Ltd. ('Indorse'), a Singapore company in which Coinsilium holds a 10% equity interest, to form a Partnership or Joint Venture ('the Partnership') in order to launch a Non-Fungible Token ('NFT') technology development studio in Gibraltar. Indorse founder and CEO Gaurang Torvekar set to lead Nifty Labs tech team.
02 March 2021 - Coinsilium Group is pleased to announce that it has received notice from IOV Labs Limited (IOV) of the early exercise of warrants over 5,500,00 new ordinary shares in the Company at a price of 4.5p for a total consideration of GBP247,500. Following the exercise of the warrants, IOV Labs shareholding in Coinsilium increases from 20,434,000 to 25,934,000 ordinary shares representing an interest of 16.85% of the Company's outstanding shares, excluding warrants and treasury shares. Following the exercise and issue of the 5,500,000 new ordinary shares, there will be 153,918,235 ordinary shares of nil par value ("Ordinary Shares") in issue and 4,680,000 Ordinary Shares held in treasury. There is a total of 158,598,235 Ordinary Shares in issue. Given the early exercise of the IOV warrants, approximately 21 months prior to expiry, the Company has agreed to award IOV with 5,500,000 replacement warrants exercisable at a price of 12p per share valid for two years from the date of this announcement.
22 March 2021 - Progress update with regards to the launch of Nifty Labs Limited: the Company has agreed to provide Nifty Labs with an initial working capital and development facility of up to GBP250,000. A proportion of these funds will be allocated to the commissioning and fast-track development work of Nifty Labs' first proprietary NFT platform solution, with Indorse to manage the technical aspects of the project.
24 March 2021 - the Company has received notice to exercise over 750,000 options ("Option Shares") at 9p per share. Funds of £67,500 have been received by the Company.
25 May 2021 - Coinsilium Group has successfully raised GBP1,155,000 gross of expenses through a share subscription and placement of 15,400,000 new ordinary shares of no par value ("Ordinary Shares") at a price of 7.5 pence per share (the "Placing Shares") from existing and new shareholders with the Company's corporate stockbroker, SI Capital. The funds raised will primarily be used for strategic investment purposes, particularly in the Non-Fungible Token ("NFT") and Open Finance sectors and to accelerate the Company's growth trajectory. Further announcements in this respect are expected to be made in due course.
29. Prior year adjustment
In the prior year, Coinsilium Group Limited had incurred a management charge payable to its subsidiary, Coinsilium UK Limtied. The management charge was recorded in error in the parent company and subsequent to the year-end, the management charge was reversed and no longer payable. Management assessed that a prior year adjustment was deemed necessary for this error in 2019.
This note explains the prior year adjustments without restating comparative information. The reclassifications arising are reflected in the Statement of Financial Position, Statement of Changes in Equity and Statement of Cash Flow as at 31 December 2019. The following tables show the adjustments recognised for each individual line item.
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| ISIN: | VGG225641015 |
| Category Code: | MSCM |
| TIDM: | COIN |
| Sequence No.: | 114693 |
| EQS News ID: | 1214067 |
| End of Announcement | EQS News Service |
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